What is a brokerage
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The traditional role of investment banks is to help clients raise money by selling stocks and bonds, either through initial public offerings or secondary issues, as well as to provide funding and advice for mergers and acquisitions. They also offer research services with ratings that assist investors in making decisions about where best to put their money. In recent years, investment banks have increasingly used their resources for in-house operations with which they trade stocks, bonds and commodities for their own account.
Brokerage firms act as intermediaries for investors to place buy and sell orders on all of the stock, bond, options and commodities exchanges. Given the rise in electronic communications networks (ECNs), investors can place orders online with real-time data and executions or may continue to go through a broker either by telephone or in person. Brokerages match buyers and sellers with the goal of obtaining the best price
for their clients on either side of the transaction.
Investment Advisory Firms
Investment advisory firms may be stand-alone companies or divisions within larger investment banks. They take a broad role in helping to oversee the finances of individuals, businesses and governments, providing advice and direct assistance with investments, taxes, insurance and estate planning. They can also act as brokers who get paid either on commission or by predetermined consultation fees.
Portfolio Management Companies
Portfolio management companies, which include mutual and hedge funds, private banks, and divisions of investment and consumer banks, manage the assets of a wide range of clients including individuals, corporations, universities and governments. Their research departments scour the world for the ideal balance of risk and return suited to each client. Mutual funds are the most widely used investment vehicle for individual investors, while hedge funds are generally available only to "accredited" investors, those with enough assets and experience to accept the concomitant risk.Source: ehow.com